The problems that Libya faces

Though Muammar Gadhafi's whereabouts remain unknown, it is almost impossible for him to regain power in Libya. Abdel Jalil, chairman of the opposition National Transitional Council, has said that Libya will hold elections within eight months and formally establish a new government. But even if the risk of rising extremist forces is ruled out, Libyan people still face a number of challenges.

The fuse that led to social unrest in Libya and other Arab countries is the high unemployment rate among the youth. The high proportion of the youth in the country's population did not become a "demographic dividend" for economic and social vitality. Instead, it became a source of instability. The high unemployment, to a large extent, can be attributed to the disordered population growth, the unreasonable economic structure in Libya and the predominance of oil and gas and other resources industries, which were not conducive to creating enough jobs for the newly increased workforce.

Over-dependence on the growth of oil revenue is usually not conducive to the development of non-oil industries (especially manufacturing) in oil exporting countries and the regular growth pattern would be difficult to change even after the ousting of the Gadhafi government. To transform the growth pattern and get out of the trap of "resource curse", the Libyan government has to have a strong operation capacity. But whether the opposition can quickly establish a new authoritative government and strong operational ability remains to be seen.

Libya suffers from an inherent shortcoming in establishing an authoritative and unified government, and the civil war has made matters worse. Historically speaking, cohesion was weak in the country with more than 140 tribes. Within the opposition camp there are a number of factions that do not have an authoritative political core. Given the many armed factions within the opposition and weak conception of unity, it is uncertain whether Libya can maintain nation unity.

Worse, regime change in Libya could aggravate the political turbulence in other Arab countries. We have seen this effect in Algeria and Syria. A stable internal and external environment is essential for a country in the process of reconstruction.

To resume political stability as soon as possible, the new Libyan leadership must avoid an extreme political cleanup, and objectively asses the merits and demerits of the Gadhafi regime. After all, it was Gadhafi who built Libya into a modern country. It was Gadhafi who nationalized the resources that were previously controlled by Western oil companies. Other Arab countries, and Iran and Latin American oil-exporting nations followed in the footsteps of Libya after which Western oil companies had to hand over more than half - instead of the earlier 5 percent - of the spoils enriching the Arab and other oil-exporting countries.

Under Gadhafi, Libya made considerable economic and social progress. In 2008, Libya's per capita GDP was $14,802, the highest in Africa. The Gadhafi government reached electricity to every nook and cranny of Libya and raised the enrollment in higher education to 55.7 percent. The new disposition in the country needs to maintain, if not improve, the economic and social progress level achieved during the Gadhafi era.

A complete repudiation of the Gadhafi government and its economic and social achievements and launching a harsh political cleanup will shake the political foundation of Libya. And this is exactly what is feared now as the opposition seems to lack an authoritative political leadership.

Top rebel leaders such Abdel Jalil and executive head of the NTC Mahmoud Jibril are former Gadhafi government officials. If the new leadership launches an aggressive political cleanup, it could harm the two new leaders. Another potential leader, Ali Tarhouni, responsible for oil and financial affairs and supported by the United States, may not have a solid foundation in Libya because of his 38 years in exile in the US.

China follows a principle of non-interference in the internal affairs of other countries and has no political interest in supporting one faction against another. Apart from urging the new Libyan leaders to respect China's sovereignty and territorial integrity, Beijing's main interest lies in business.

China has many engineering and construction projects in Libya, which are direct investments for civil use. It exports more products to Libya than it imports from the North African country. To achieve maximum business interests in Libya, China wants Libya to be united and territorially secure.

Ahmed Jehani, the National Transitional Council official in charge of reconstruction, has said that all lawful contracts, including those in the oil and gas and other fields will be honored. The National Transitional Council has been guarding projects Chinese companies have contracted and already exported the first consignment of crude oil to China, for it knows that China is willing to participate in Libya's post-war reconstruction.

The new Libyan government has to improve people's livelihood and keep the country united, and has no reason to exclude Chinese companies that are known to supply inexpensive but excellent products and are good in construction projects.

If the new Libyan government wants the services of Chinese companies in post-Gadhafi Libya in addition to fulfilling the old contracts, it should compensate Chinese enterprises and residents that suffered economic losses during the civil war, and treat them as equals to US and European companies negotiating new contracts. China is confident that the new Libyan government will make informed decisions.

The author is a researcher with the Chinese Academy of International Trade and Economic Cooperation, affiliated to the Ministry of Commerce.

(China Daily 09/06/2011 page9)